Given Boscombe's advice was consistent, over a long period before Release to Service, why on earth "factor in" the implications arising from a statement that the software was "positively dangerous".
All the airworthiness and safety management regulations demand that you RESOLVE the problem/risk/hazard on a safety critical system. See the Nimrod thread and the discussions over ALARP.
Do you think the risk was ALARP when, in June 94, Boscombe grounded their PE Fleet? Surely, if the risk mitigation was already "factored in", they (Boscombe) would have been party to the necessary trials/testing and drafting of changes to the documentation and would have no good reason to stop flying?
Frankly, this is a far more clear cut case than either C130 or Nimrod.
Dalton is, in effect, admitting MoD breached their own mandated regulations.